Getting Rid of Schrödinger’s Immigrant
Dr Alan Gamlen from Victoria’s School of Geography, Environment and Earth Sciences discusses the validity of Immigrant Investor Programmes.
The following commentary is provided by Dr Alan Gamlen from Victoria University of Wellington’s School of Geography, Environment and Earth Sciences, Chris Kutarna from the University of Oxford and Dr Ashby Monk from Stanford University.
One of the best jokes circulating on social media today is a bogus announcement that Donald Trump is warning Americans about ‘Schrödinger’s immigrant, a foreigner who lazes around on benefits while simultaneously stealing your job. The gag plays on the famous quantum physics thought experiment in which an unobserved cat in a sealed box exists in two contradictory states—both dead and alive—at the same time.
The joke is that both immigrant stereotypes can’t possibly be true at once. The serious point is that neither stereotype finds support in rigorous migration research.
Unemployment rates among immigrants quickly settle to similar or lower levels than the rate among non-immigrants, and immigrants as a group typically contribute more in taxes than they consume in benefits. Meanwhile, the effect of immigration on native wages and unemployment, if any, is vanishingly small, because immigrants tend to do different jobs, often the essential but unglamorous ones that native workers won’t do.
As well as stoking hostility, these unfounded anti-immigrant attitudes are poisoning the global refugee system. When states shut their borders to refugees they leave countries closest to conflicts to carry massive influxes. If these states buckle, conflicts can spread. Today Lebanon, Jordan and Turkey bear immense burdens while immigrant nations, like New Zealand, take token quotas.
For both security and humanitarian reasons we need to distribute an increasing number of refugees globally, but we can’t while countries are obsessed with fears of Schrödinger’s immigrant.
Is there a way to defeat this false paradox? Here’s a new thought experiment. Imagine a mechanism allowing immigrants to support themselves economically and create jobs and infrastructure for others. Imagine an institutional investment vehicle, funded from the fees and investments of immigrants and refugees, dedicated to investing in job-creating business start-ups and sponsoring the infrastructure improvements needed to accommodate newcomers in the immigrants’ adopted countries.
In a great Migration Studies article, Katy Long highlights the so-called ‘Nansen Stamp Fund’. Instead of languishing in camps and queuing for meager quotas, refugees of the 1917 Russian Revolution bought ‘Nansen Passports’—essentially visas which allowed holders to access both foreign territories (to save themselves immediately), and foreign labour markets (to help themselves over the longer term). They went where their labour was needed, and the funds from their visa fees made them self-supporting.
Could a modern version of the Nansen Fund get rid of the Schrödinger’s Immigrant fallacy? It’s a question worth asking, not least because governments are experimenting with vehicles that resemble the Nansen Fund, albeit for reasons other than alleviating anti-immigrant sentiment or solving the refugee crisis.
The experimental vehicles in question are Immigrant Investment Funds—institutional investment funds seeded by Immigrant Investor Programmes (IIPs) through which governments monetise the charm and allure of their country by exchanging national membership rights in return for investment capital.
In a new working paper, we cite 60 different IIPs in 57 countries, including New Zealand, most established in the last 20 years.
However, few governments have yet found the right recipe for a successful IIP. Most have failed to set or monitor meaningful programme objectives, instead just dissolving immigrant investments into the private economy or the government treasury, losing any distinctive identity or capacity to be channelled toward a specific public good.
Meanwhile many argue that selling citizenship is inherently corrupt. The controversy surrounding the admission of internet billionaire Kim Dotcom through New Zealand’s Investor Plus category is just one example of the kinds of concerns these visas raise.
With such intangible economic benefits alongside such obvious political downsides IIPs often struggle to survive.
Still, we see the seed of a good idea in today’s IIPs. In a climate of sharply falling government budgets for urgent public investments, the benefits of using IIPs to import capital and engaged investor immigrants should not be too hard to demonstrate. But proceeds from IIPs need to be managed to deliver both clear financial returns and clear public benefits.
A solution could be found in the body of principles and best practices emerging around Sovereign Development Funds—a successful species of institutional investment vehicle that also pursues a double bottom-line of commercial profit and public benefits. Sovereign Development Funds are funded by traditional sovereign wealth (e.g. oil or mineral reserves). Immigrant Investment Funds are funded by sovereign wealth of an alternative kind: the country’s charm and allure. Otherwise, they are much the same.
Perhaps if more of these IIPs followed the model of Sovereign Development Funds, more could simultaneously attract foreign capital to stimulate growth, shore up the struggling global refugee system, and show up the Schrödinger’s Immigrant problem as the joke that it is.
Acknowledgment: An earlier version of this article was published on the Oxford University Press Blog on International Migrants Day, 18 December 2015.